Three-quarters of payday loan customers who have turned to Citizens Advice for help may have had grounds to make an official complaint to the Financial Ombudsman Service, the charity says.

Citizens Advice analysed 665 payday loan cases reported by consumers between 1 January and 30 June this year and concluded that in 76% of them borrowers could have made an official complaint and possibly won compensation.

One in five of the cases were possible cases of fraud, where a person was chased for a loan they had not taken out.

More than a third involved problems with continuous payment authorities, including lenders, extracting money from banks accounts that they were not authorised to take.

Harassment and unfair treatment by lenders accounted for the other problems faced by borrowers that Citizens Advice said should have been reported.

Payday loans have attracted strong criticism from this charity and other debt charities, who have accused lenders of failing to do proper affordability checks on borrowers and for putting people under pressure to roll over loans.

High-interest loans can quickly become very expensive for consumers, and charities have reported seeing people trapped in a cycle of debt.

The use of continuous payment authorities to collect debts has been particularly problematic. Borrowers have reported having their accounts drained of money before they have paid for essentials.

Citizens Advice is urging borrowers to take their complaints to the ombudsman – the body which adjudicates on cases that have failed to be sorted out to consumers' satisfaction – to seek compensation and put pressure on the industry to clean up its act.

If a complaint is upheld by the Financial Ombudsman the lender can be ordered to put things right and, if the consumer has lost out financially, to pay compensation. In some cases borrowers could be eligible for a refund on loan repayments or other charges they have paid.

Gillian Guy, chief executive of Citizens Advice, said: "The level of debt and hardship caused by some payday loans is absolutely scandalous and people often feel completely powerless to do anything about it. But consumers can fight back.

"By making your voice heard you will expose the bad behaviour of lenders and put pressure on them to clean up their act, which could help stop similar problems happening to other people."

Between April and June just 160 complaints about payday lenders were made to the ombudsman, but 72% of those were upheld in favour of the borrower.

Only about one in eight people who contact the ombudsman about payday loans make a complaint, against one in four across other sectors. It is thought that the stigma connected with arranging to have this type of short-term borrowing could be deterring people from making an official complaint.